April 1, 2019 No Slow Boats to China! by Lester Murray

An overnight report, showing that the rumored death of Chinese manufacturing has been greatly exaggerated, has ignited a worldwide rally in equity markets. With China's Purchasing Managers' Index escape from contractionary territory, the overall outlook for global financial conditions has brightened. As one might expect, this translates to a sell-off for credit markets and American Treasuries have not been spared.  The Ten-Year's yield is once again approaching 2.50% with a price decline of not quite 3/4's of a point. The yield curve has partially uninverted with 90 day bills yielding around 2.38%.  But, there's still a low spot between 2's and 5's. Domestic news is less than shiny with this morning's report that Retail Sales slipped by 0.2% in February.  Our own manufacturing report looked even better than Beijing's with the ISM's Manufacturing Index exceeding expectations as it rose to 55.3 from 54.2. Analysts were only looking for a slight increase to 54.5.